Techcombank's annual general meeting of shareholders was held in Ha Noi on Saturday. — VNS Photo

Techcombank (TCB) has set a pre-tax profit target of VND13 trillion (US$559.3 million) in 2020, increasing slightly one per cent from last year.

This target was approved at its annual general meeting of shareholders (AGM) held in Ha Noi on Saturday.

Answering shareholders’ question about the bank's modest profit growth goal, Ho Hung Anh, Chairman of Techcombank's Board of Directors, said this was a cautious plan due to the impact of the COVID-19 pandemic. In addition, it would also focus strongly on digital transformation, leading to an increase in investment costs and interest rate support for customers affected by the disease, resulting in a decline in profit margin.

“However, if the economic situation of Viet Nam and the world recover soon, the bank's business results would have changes in the third and fourth quarter of this year,” Anh said.

The bank’s total assets were targeted to increase to VND431.4 trillion, posting a 12 per cent year-on-year increase. Deposits will grow to VND268.8 trillion and loan balance to VND291.5 trillion, both increasing by 13 per cent against 2019, in line with the current credit allowance from the State Bank of Viet Nam (SBV). The bank also planned to keep non-performing loans (NPL) below 3 per cent, as stipulated by the central bank’s guidance.

Techcombank’s shareholders approved the plan for retained earnings and investment into fundamental capabilities to continue future growth momentum. The bank’s strong investment in people and systems accounts for its remarkable success in its transformation journey. Techcombank topped the banking sector in terms of profitability and operational efficiency with return of asset (ROA) of 2.9 per cent and was among the Top 2 most profitable banks in 2019.

It also approved the increase in charter capital to VND35 trillion in conjunction with the issuance of 4.7 million ESOP shares for key outstanding employees, in line with resolutions passed in the previous AGM. The shares issued are for purchase rights awarded to eligible employees for performance in 2017.

Chairman Anh said Techcombank’s strategy was to focus on some sectors and segments in which they have good control and the largest market share.

For example, five years ago, Techcombank identified the real estate segment as having advantages and rapid development. They could be fully able to control risks, develop business and reality showed that this option was a right selection in the past five years.

He said Techcombank had always chosen big customers with high prestige to create attractive products and services in the market. The bank had been very cautious in selecting customers, not much but be good; not spreading to customers who have high risks.

“Techcombank always follows the trend of low risk, high profit. Instead of working with all 10 customers, we only work with the best three customers. Instead of working in 10 fields, only 2-3 services that the bank can control,” he said.

With concerns from shareholders about the real estate market expected to freeze due to the pandemic, the chairman said that the bank had developed a plan to forecast risks and everything has been under control according to Basel II.

“The bank's capital adequacy ratio (CAR) is nearly 16 per cent, nearly doubling the minimum requirement of Basel II’s Pillar 1. So it is all under control.”

Techcombank planned to expand the ecological model approach for the fast-moving consumer goods value chain and reduce the dependence on housing chains (ReCoM). It would continue to accelerate the digital banking model to meet with demands and enhance customers' experience. — VNS